To accomplish the company’s long-term objectives the follow strategies have been put into place: forward/backward/horizontal integration, market development, and related diversification. Grainger’s forward integration strategy included the acquisition of WFS Enterprises, Inc. WFS Enterprises is a leading distributor of supplies and tools in Canada. (Grainger, Media Relations, Joe Micucci, 2014) By developing new distribution centers in New Jersey and Toronto the company has applied their market development strategy. Grainger has implemented a related diversification strategy by adding products lines with related offerings such as metal workings and power tools to compliment there existing supplies. In addition, W. W. Grainger has acquired many companies through a backward and horizontal strategy.
Grainger’s forward/backward/horizontal strategies have helped the company to accomplish the long-term objective of growth, foundation, and shareholder returns. The company has acquired several supplier, distributors, and competitors. According to an article on Crains website, “Grainger said that about 5 percent of the sales growth...
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...a competitor can add value by gaining customers, HD Supply currently supports 500,000 customers. (HD Supply Website, 2015) Through the acquisition Grainger will gain HD Supply Waterworks and HD Supply Power Solutions, both of which are industry leaders. (HD Supply Website, Fact Sheet, 2015)
Both strategies, product development and expanding acquisition strategy, will show Grainger’s uniqueness by creating a value-based product for the consumer. The power tools will products value and create a new and improved product line. Creating the product development strategy could also lead to more products being added to the selection. An example would be a cordless drill. Once the drill is added then the company may further add extended battery packs. The expanding acquisition strategy will create uniqueness by having the stability to acquire a large, well-known competitor.
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